New Delhi: Gold prices traded in a narrow range on Thursday as cautious investors stayed on the sidelines ahead of the key US inflation report to gauge the size of the Federal Reserve’s future interest rate hikes.
The US consumer price index (CPI) report for October is due later in the day. Economists expect core inflation to decline both on a monthly and annual basis. Gold could rise if there are signs of cooling inflation.
Gold futures on
were trading flat, maringally higher by 0.11% or Rs 55 at Rs 51,561 per 10 grams. However, silver futures dropped by 0.32% or Rs 199 at Rs 61,362 per kg.
Gold is seen as a hedge against inflation, which rising rates aim to tackle, thereby diminishing the metal’s appeal. Higher interest rates also make other assets more attractive compared with non-interest-bearing bullion.
Ravindra Rao, CMT, EPAT VP-Head Commodity Research, Kotak Securities, said gold is bound in a range amid uncertainty on US midterm elections and US inflation data release.
“Economists are expecting a drop in both monthly and yearly core CPI numbers that might be supportive for gold prices as lower inflation could prompt the Fed to slow down its rate hike pace,” he added.
The World Gold Council said in a note on Friday that a stable local gold price, weak RMB and economic uncertainty supported gold sales in regions such as Beijing and Shanghai in October.
In the spot market, the highest purity gold was sold at Rs 51,514 per 10 grams while silver was priced at Rs 61,550 per kg on Wednesday, according to the Indian Bullion and Jewellers Association.
The spot prices of gold have topped the Rs 51,000 mark in almost one month, whereas the prices of Silver have jumped about Rs 6,000 per kg in the last three weeks.
Rahul Kalantri, VP-Commodities, Mehta Equities, said that gold and silver prices moved in a narrow range but the bulls still have the technical momentum to suggest more price upside in the near term.
“Some safe-haven demand has been featured in the precious metals markets in the previous session, as the cryptocurrency markets have turned extremely wobbly,” he added.
Trading Strategy
Bullion charts are showing profit booking with downside possible in the coming days, said Amit Khare, AVP- Research Commodities, Ganganagar Commodity. “Momentum Indicator RSI also indicates the same,” he added.
He advised traders to take fresh short potions in gold and silver with support for the yellow metal at Rs 51,300-51,000 and resistance at 51,700-51,900, whereas support for silver stood at Rs 61,000-60,000 and resistance at Rs 62,000-62,500.
Global markets
Spot gold was flat at $1,706.76 per ounce, as of 0220 GMT. U.S. gold futures fell 0.2% to $1,709.80.
Spot silver rose 0.3% to $21.06. Platinum climbed 0.1% to $986.07, while palladium was down 0.1% at $1,862.62.
Spot silver was up 0.1% at $21.36. Platinum rose 0.6% to $1,003.40 and palladium was steady at $1,920.40.
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